After two years of recession, the semiconductor equipment market is
projected to achieve growth in 2014. In 2011, the semiconductor
equipment market size hit a record high of USD43.532 billion, but it
witnessed a drop by 15.2% in 2012 and a further decline by 8.1% in 2013.
The reduction came mainly as the steep decrease of backlog orders from
North America and South Korea. Notably, the contracted orders from North
America resulted largely from the glooming PC market and Intel's
reduction of capital expenditure for equipment, while the shrinkage of
orders from South Korea was heavily duel to the suspension of investment
in DRAM.

In 2014, the driving force of the semiconductor equipment market is
mainly sourced from foundry and memory. In particular, foundry began to
step into 20nm domain, while memory is ushering in 3D era. In the era of
20nm, semiconductor vendors employ two routes: double/multiple
patterning and EUV. Double/multiple patterning is more technologically
advanced than EUV, although it means substantial cost rise in
manufacturing and equipments, especially for etching equipments.

EUV can cut the manufacturing and equipments cost significantly, albeit
EUV itself costs as high as USD100 million. But counted by the total
cost, 14nm wafer equipped with EUV technology is roughly 40% lower than
that equipped with multiple patterning technology. However, there are
many hurdles for EUV remained to be addressed. One of them is light
source. Multiple e-beam direct write is well low-efficiency, thus
failing to meet the standard for practical use.

Equipment vendors have failed to catch up with the development of
foundry, especially the ASML which almost monopolize the global
lithography market, so foundry will have to slow down their pace towards
advanced node. The cost of multiple patterning may be OK for customers,
but it is not the case when it comes to the cost of triple patterning.
Nevertheless, this cannot prevent industrial players from making
continued research, so the procurement of equipments still keeps growing.

Taiwan became the largest semiconductor equipment market. Taiwan-based
industrial players such as TSMC and UMC make bulk buying of advanced
equipments. The estimate shows that Taiwan semiconductor equipment
market size will bag USD10.99 billion by 2014 and that the figure by
2015 will slightly decline to USD10.88 billion.

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